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Weston Makes Uniforms and Overalls for Employees in Any Industry

question 49

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Weston makes uniforms and overalls for employees in any industry where there is a potential for fire injury.It uses fabric from Indie Fabric Co.for all of the uniforms it manufactures.If there is a decrease in the demand for products in the chemical industry,then there will be a decrease in employment in that industry.This will lead to a decrease in the demand for such uniforms.Since fewer uniforms will be needed,the sales for Indie fabric will decrease.This is an example of:


Definitions:

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to products, based on a planned level of activity or volume of production.

Manufacturing Overhead Cost

Indirect costs related to the production process, such as factory utilities, that cannot be traced directly to specific products.

Job-Order Costing System

A costing method used when products or services are produced upon specific customer orders, allowing for detailed tracking of costs for each job.

Unit Product Cost

The total expense incurred in creating a product, divided by the number of units produced.

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